New Proposed Rule by FTC Aims to Prohibit Fake Reviews

The Federal Trade Commission (FTC) has proposed a new rule aimed at banning fake online reviews. This represents the FTC’s most aggressive action yet to combat review fraud. The rule, if implemented, would prohibit companies from engaging in activities such as buying or selling fake reviews, suppressing negative reviews, review hijacking, and leaving undisclosed product reviews by company insiders. Violators would be subject to civil penalties. Samuel Levine, director of the FTC’s Bureau of Consumer Protection, believes the rule will help level the playing field for honest businesses.

Fake reviews and review abuse have become major issues for online platforms like Amazon, Google, and Yelp. Bad actors use fake reviews to boost their products in search results and drive sales. Some even pay users to leave negative reviews on their competitors’ products, a tactic known as “review sabotage.” In response to the prevalence of review fraud, a network of online businesses has emerged offering fake reviews for as little as a few dollars each. Amazon has struggled to combat fake reviews on its third-party marketplace and has taken legal action against fake review brokers and Facebook group administrators. The company also relies on human moderators and machine-learning tools to detect suspicious activity on its site.

The FTC has been actively cracking down on fake reviews, as they deceive consumers and harm honest businesses. In February, the FTC fined supplement maker Bountiful Co. for review hijacking, and the agency has filed multiple cases against companies using fake reviews to sell products online. The FTC acknowledges that the emergence of generative artificial intelligence may make it easier for bad actors to write fake reviews. The proposed rule is currently open for a 60-day public comment period before a final version is voted on.